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Could Trump’s Sovereign Wealth Fund Spark a Stock Market Surge? A Guide for Retail Traders


On February 3, 2025, President Donald Trump signed an executive order that could reshape the U.S. economy—and potentially your stock portfolio. The order directs the Treasury and Commerce Departments to develop a plan for a U.S. sovereign wealth fund (SWF) by May 4, 2025. For retail traders unfamiliar with SWFs or this development, this article breaks down what the fund is, why it matters, and which stocks might benefit. We’ll explore the sectors and tickers poised for gains, drawing from historical patterns and Trump’s economic priorities, while keeping the risks clear. Let’s dive in.

What Is a Sovereign Wealth Fund?

A sovereign wealth fund is a state-owned investment vehicle that manages a country’s wealth to achieve long-term economic goals. Think of it as a giant pool of money controlled by the government, invested in stocks, bonds, real estate, or infrastructure to generate returns for future generations or fund national priorities. Unlike pension funds or private investment firms, SWFs are typically backed by government revenues, such as oil exports (e.g., Norway’s $1.7 trillion fund) or trade surpluses (e.g., Singapore’s Temasek).

Globally, SWFs manage over $12 trillion in assets. Norway’s fund owns 1.5% of all global stocks, while Saudi Arabia’s Public Investment Fund (PIF) has stakes in tech giants like Uber and electric vehicle maker Lucid Motors. These funds often invest in stable assets like real estate or strategic sectors like technology and defense, aiming for both financial returns and national influence.

The U.S., however, has never had a federal SWF. States like Alaska and Texas have smaller funds fueled by oil or land revenues, but a national fund would be a bold departure. Trump’s order aims to change that, positioning the U.S. to compete with global economic powers.

Trump’s Executive Order: The Details

On February 3, 2025, Trump signed an executive order tasking Treasury Secretary Scott Bessent and Commerce Secretary nominee Howard Lutnick with creating a blueprint for a U.S. SWF within 90 days—by May 4, 2025.

The plan must outline:

  • Funding mechanisms: How the fund will raise money (e.g., tariffs, asset sales, or borrowing).
  • Investment strategy: What assets or sectors the fund will target.
  • Structure and governance: How the fund will be managed and who will oversee it.

Trump’s vision is ambitious. He described the SWF as a tool to “promote fiscal sustainability, lessen the burden of taxes, establish economic security for future generations, and promote U.S. economic and strategic leadership internationally.” He suggested it could finance “great national endeavors” like infrastructure (roads, airports), manufacturing, medical research, and even acquiring TikTok, the Chinese-owned social media platform facing a U.S. ban unless sold.

However, details are scarce. Unlike oil-rich nations, the U.S. runs a budget deficit ($1.8 trillion in 2024), making funding tricky. Trump floated tariffs as a revenue source, but estimates suggest they’d raise only $20 billion in 2025—far short of a trillion-dollar fund. Other ideas include selling federal land, leveraging cryptocurrency reserves (Trump mentioned bitcoin), or issuing debt, but these require congressional approval, which is uncertain. The plan’s release, expected by May 4, 2025, will clarify these points, but retail traders can start positioning now based on likely outcomes.

Why Should Retail Traders Care?

A U.S. SWF could move markets in several ways:

  • Direct Investments: If the fund buys stocks or stakes in companies, those firms could see share price surges. Norway’s SWF, for example, boosts stock prices when it invests due to its massive capital.
  • Indirect Boosts: Government contracts for infrastructure, defense, or research could drive revenues for targeted companies, lifting their stocks.
  • Sector Focus: The SWF’s priorities (e.g., manufacturing, tech) could spark rallies in specific industries, creating opportunities for traders.
  • Market Sentiment: A well-received SWF plan could signal economic strength, boosting broader market confidence, while delays or political gridlock could dampen enthusiasm.

For retail traders, the key is identifying which sectors and stocks align with the SWF’s goals before the plan’s release. Early movers could capitalize on price run-ups as institutional investors and hedge funds adjust their portfolios.

Historical Context: Do Agencies Meet 90-Day Deadlines?

To gauge the SWF plan’s timeline, let’s look at past presidential orders with 90-day deadlines. Historically, agencies meet these deadlines 60-80% of the time for straightforward tasks like drafting reports or proposing plans, based on examples from recent administrations:

  • Joe Biden (2021): Biden’s environmental orders (e.g., Executive Order 13990) saw agencies like the EPA submit initial reports within 90 days, though complex regulations often took longer.
  • Donald Trump (2025): In his second term, Trump issued dozens of orders with 90-day deadlines. By April 20, 2025, agencies met deadlines for workforce reduction and foreign aid plans, but complex tasks like TikTok enforcement faced extensions.

The SWF plan is complex, requiring funding solutions and legal frameworks. While agencies are likely to submit a draft by May 4, 2025, a final plan could take longer, especially if Congress or legal challenges intervene. Traders should monitor news around May 4 for market-moving updates, but expect some uncertainty until the fund’s structure is clear.

Sectors and Stocks Poised to Benefit

Based on Trump’s statements, the SWF’s objectives, and global SWF trends, here are the sectors and publicly traded companies (with tickers) most likely to gain. We’ve prioritized U.S. firms, as the fund will likely emphasize domestic growth, and focused on companies with strong fundamentals or clear ties to the SWF’s goals.

  1. Infrastructure and Construction

Why It Matters: Trump highlighted infrastructure (highways, airports) as a priority, and SWFs globally invest in stable, long-term assets like roads and bridges. The fund could fund public-private partnerships or direct projects, boosting construction firms.

  • Caterpillar Inc. (CAT): Makes construction equipment like bulldozers. A surge in infrastructure spending would drive demand. Why Buy? Stable, global brand with a 2% dividend yield.
  • Vulcan Materials Company (VMC): Supplies gravel and sand for roads. Why Buy? Direct exposure to construction demand, with a strong U.S. presence.
  • Fluor Corporation (FLR): Builds large-scale infrastructure projects. Why Buy? Could win major government contracts, though it’s more volatile.
  • AECOM (ACM): Designs and manages infrastructure projects. Why Buy? Steady revenue from federal work, less risky than FLR. Trading Tip: CAT is the safest bet for stability; FLR offers higher upside if contracts materialize.
  1. Manufacturing and Industrial

Why It Matters: Trump’s “America First” agenda emphasizes U.S. manufacturing, and tariffs could protect domestic producers. The SWF may invest in factories or supply chains.

  • General Electric (GE): Produces aerospace, power, and renewable energy equipment. Why Buy? Diversified with strong U.S. ties.
  • 3M Company (MMM): Makes industrial materials. Why Buy? Broad exposure to manufacturing growth, plus a 2.5% dividend.
  • Nucor Corporation (NUE): A leading steel producer. Why Buy? Benefits from infrastructure and tariffs shielding U.S. steel.
  • Deere & Company (DE): Manufactures farm and construction machinery. Why Buy? Tied to rural development and infrastructure. Trading Tip: NUE is a standout due to steel’s role in infrastructure and trade policy; DE offers rural exposure.
  1. Technology and Social Media

Why It Matters: Trump suggested the SWF could acquire TikTok, which faces a U.S. ban unless sold by its Chinese owner, ByteDance. The fund may also invest in tech to counter China’s dominance.

  • Oracle Corporation (ORCL): A potential TikTok technology partner. Why Buy? High upside if TikTok is acquired, but risky if the deal fails.
  • Microsoft Corporation (MSFT): Considered buying TikTok in 2020 and offers cloud infrastructure. Why Buy? Safer tech play with broader growth drivers.
  • Meta Platforms, Inc. (META): Could gain if TikTok is banned, boosting Instagram’s market share. Why Buy? Strong fundamentals, less reliant on SWF.
  • NVIDIA Corporation (NVDA): Leads in AI and semiconductors. Why Buy? Strategic tech investments could target chipmakers. Trading Tip: ORCL is the riskiest but has the biggest TikTok-related upside; MSFT and NVDA are safer long-term holds.
  1. Medical Research and Healthcare

Why It Matters: Trump cited medical research as a focus, likely for innovation or pandemic preparedness. SWFs often invest in biotech for growth.

  • Pfizer Inc. (PFE): Develops vaccines and drugs. Why Buy? Stable with a 5% dividend yield.
  • Moderna, Inc. (MRNA): Pioneers mRNA technology. Why Buy? High growth if research funding flows, but volatile.
  • Gilead Sciences, Inc. (GILD): Focuses on antivirals. Why Buy? Balanced risk-reward for biotech exposure.
  • Amgen Inc. (AMGN): A biotech giant with a broad portfolio. Why Buy? Steady performer with a 3% dividend. Trading Tip: PFE and AMGN are conservative picks; MRNA suits risk-tolerant traders betting on research breakthroughs.
  1. Energy and Natural Resources

Why It Matters: Trump’s push for “energy dominance” aligns with SWFs like Alaska’s, which use oil revenues. Tariffs could boost domestic energy.

  • Exxon Mobil Corporation (XOM): A top oil and gas producer. Why Buy? Stable with a 3.5% dividend, tied to Trump’s fossil fuel focus.
  • Chevron Corporation (CVX): Another energy giant. Why Buy? Similar to XOM, with strong U.S. operations.
  • ConocoPhillips (COP): Focuses on U.S. energy. Why Buy? Benefits from resource revenues.
  • NextEra Energy, Inc. (NEE): Leads in renewables. Why Buy? A hedge if the SWF diversifies into green energy. Trading Tip: XOM is the strongest pick for Trump’s agenda; NEE appeals to long-term sustainability bets.
  1. Defense and Aerospace

Why It Matters: The SWF’s “strategic leadership” goal suggests defense investments, a common SWF priority for national security.

  • Lockheed Martin Corporation (LMT): Makes fighter jets and missiles. Why Buy? Stable with a 2.5% dividend.
  • RTX Corporation (RTX): Produces aerospace and defense tech. Why Buy? Broad exposure to military spending.
  • Boeing Company (BA): Covers defense and aviation. Why Buy? Higher risk due to commercial struggles, but potential upside.
  • Northrop Grumman Corporation (NOC): Specializes in defense tech. Why Buy? Steady with growing cybersecurity focus. Trading Tip: LMT and RTX are low-risk defense plays; BA is riskier but could rally with aerospace support.
  1. Real Estate and REITs

Why It Matters: SWFs invest heavily in real estate for stable returns, and the U.S. fund could sell federal land or buildings, spurring activity.

  • Prologis, Inc. (PLD): A logistics REIT. Why Buy? Benefits from infrastructure-driven warehouse demand.
  • American Tower Corporation (AMT): Owns communication towers. Why Buy? Stable with a 2% dividend.
  • Equinix, Inc. (EQIX): Operates data centers. Why Buy? Ties to tech and infrastructure growth. Trading Tip: PLD and AMT are safe, income-focused picks; EQIX offers tech exposure.

Top Picks for Retail Traders

If you’re looking to act now, here are five tickers with the strongest case:

  • CAT: Infrastructure is a clear SWF focus, and Caterpillar’s global reach ensures resilience.
  • NUE: Steel demand ties to infrastructure and tariffs, offering both growth and stability.
  • ORCL: TikTok’s potential acquisition makes Oracle a high-reward (but high-risk) play.
  • XOM: Aligns with Trump’s energy agenda and offers a reliable dividend.
  • LMT: Defense is a safe bet for strategic SWF investments, with consistent returns.

Remember to do your own research before you make any moves.

Risks to Watch

While the SWF could spark gains, retail traders should be cautious:

  • Funding Uncertainty: The U.S. deficit complicates funding. Tariffs, asset sales, or borrowing face political and practical hurdles, and Congress may block ambitious plans.
  • Market Distortion: A SWF investing heavily in U.S. stocks (60% of global market cap) could inflate prices artificially, risking volatility if investments falter.
  • TikTok Speculation: Acquiring TikTok is a long shot due to legal and governance issues. Betting on ORCL or MSFT carries significant risk if the deal collapses.
  • Delays: Complex plans often miss 90-day deadlines or produce interim reports. If the May 4, 2025, release lacks clarity, markets may react negatively.
  • Political Gridlock: Congressional approval is likely needed, and partisan divides could stall the fund’s launch.

How to Trade the SWF Announcement

Here’s a game plan for retail traders:

    • Before May 4, 2025:
      • Research: Focus on infrastructure (CAT, NUE), energy (XOM), and defense (LMT) for safer bets. Consider ORCL for a speculative TikTok play.
      • Diversify: Spread investments across sectors to hedge uncertainty. A mix of CAT, XOM, and LMT balances growth and stability.
      • Monitor News: Watch for leaks or updates from the Treasury or Commerce Departments. X posts or financial news may signal progress.
      • Consult your financial adviser.
    • On or After May 4, 2025:
      • Assess the Plan: If the plan specifies sectors (e.g., infrastructure, tech), buy leading stocks in those areas. If vague, stick to broad market ETFs like SPY to avoid missteps.
      • Watch Volume: High trading volume in stocks like CAT or ORCL post-announcement could signal institutional buying—follow the smart money.
      • Set Stops: Use stop-loss orders (e.g., 5-10% below entry) to protect against volatility if the plan disappoints.
    • Hold Core Stocks: Stable names like CAT, XOM, and LMT can be held for months if the SWF gains traction.
    • Rotate Speculative Picks: Sell high-risk bets like ORCL if TikTok news fades, reallocating to confirmed SWF beneficiaries.
    • Follow up with your financial adviser.

Conclusion

Trump’s sovereign wealth fund, ordered on February 3, 2025, could be a game-changer for the U.S. economy and stock market. By May 4, 2025, we’ll know more about its funding, investments, and priorities, but early signals point to infrastructure, manufacturing, energy, defense, and possibly tech as key beneficiaries. Stocks like Caterpillar (CAT), Nucor (NUE), Exxon Mobil (XOM), Lockheed Martin (LMT), and Oracle (ORCL) are among the top candidates for retail traders to watch.

However, the fund’s success hinges on overcoming funding challenges and political hurdles. Retail traders should approach this opportunity with a mix of optimism and caution, diversifying across sectors and staying nimble as details emerge. Keep an eye on May 4, 2025, for the plan’s release, and use the strategies outlined here to position your portfolio for potential gains. Happy trading!

Disclaimer: Investing involves risks, and past performance doesn’t guarantee future results. Consult a financial advisor before making investment decisions. This article is for informational purposes only and not financial advice.